The OT thread V1

[pbjosh]

1. Steve is not talking about the low income housing credit, he is talking about Mortgage income deduction. ~$364 Billion/year. This

http://nationalaglawcenter.org/wp-co...crs/R41596.pdf

Similarly, the employer healthcare tax credit has the net effect of injecting money into the healthcare system by subsidizing it. If you're a fan of Ron/Rand Paul, you'll remember their (accurate) trope that when you subsidize something, you get more of it. In this case we are subsidizing expensive health care. Much in the same way that our college loan system has allowed educational costs to balloon to the point where they nearly ate my generation, and in the same way that low cost loans (both from predatory lenders and through legislation that allowed low income home loan recipients to overextend their budgets) destablized the housing market. I think there's plenty of room for bipartisan consensus here.

Yep, my bad - I got that above.

2. .
The average household in the bottom quintile received $29,015 in benefits and paid $4,251 in taxes, generating an average fiscal deficit of $24,764 per household. In the top quintile, the average household paid $69,704 in taxes and received $21,515 in benefits and services, yielding an average fiscal surplus of $48,189 per household.
Ignoring some specifics, let's just say that everyone gets a bunch of stuff for being an American, and it's around $21.5k. Because they need assistance, the lower income brackets get an extra ~$8k. I think these numbers are a little more visceral, but they're from the same report. Focusing on the idea that there's simply a population on either side of the zero is overly simplistic, in my opinion. (The highest quintile begins at household income ~ $265,000.)

That is a clean and simple way to say it, yes, and very few people understand it.

Also there is something called the $60k benefit curve, where there is kind of a drop off at that point. It is a hard line and I am game for making it a bit more fuzzy.

3. Is this such a bad thing? And by "this" I mean redistribution of wealth. I think this is exactly where the principled argumentation can become toxic.

On a very first pass analysis, yes, "Taxation is theft". This is an ideological wellspring from which much of fiscal conservatism springs, and while it's useful to remember, it's not near capturing the entire story. I think there's certainly an argument to be made for hugely simplified tax curves, but that's never what's actually proposed. I find the focus on estate tax particularly rankling - though it's easily dodged by practical measures

To understand why redistribution of wealth is necessary and important, one needs to to understand a fair bit of national macroeconomics. Monetary velocity is an important driver of a market economy, because the number of transactions is analogous to the speed of information processing in the market. It's been robustly demonstrated that injection of money into a system, and preferentially to lower income consumers, increases national economic output. This is the "pump priming" mechanism. Lots was written about this in response to the 2008 financial crisis. I'm personally of the belief that the QE could have been handled even more efficiently by shunting more money to consumers and less to banks, but even so the post-facto reports generally lionize QE.

This is sort of the basis for the arguments between Keynesian and Austrian financial positions.

I defer to Christina Romer in this argument (Obama's former finical adviser, and a Berkeley professor) - because it really is an amazing work.

https://newrepublic.com/article/1201...crisis-defense

Here is the link to the paper. http://www.nber.org/papers/w13264

The basic is very consistent: For every tax dollar you take out, it results in the decrease of the GDP by $3.

"This paper investigates the impact of changes in the level of taxation on economic activity. We use the narrative record -- presidential speeches, executive-branch documents, and Congressional reports -- to identify the size, timing, and principal motivation for all major postwar tax policy actions. This narrative analysis allows us to separate revenue changes resulting from legislation from changes occurring for other reasons. It also allows us to further separate legislated changes into those taken for reasons related to prospective economic conditions, such as countercyclical actions and tax changes tied to changes in government spending, and those taken for more exogenous reasons, such as to reduce an inherited budget deficit or to promote long-run growth. We then examine the behavior of output following these more exogenous legislated changes. The resulting estimates indicate that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes. The large effect stems in considerable part from a powerful negative effect of tax increases on investment. We also find that legislated tax increases designed to reduce a persistent budget deficit appear to have much smaller output costs than other tax increases."

That means if you reduce taxes, in total, you increase GDP. This results in a see-sawing affect where when we come into a point of economic crisis we elect leaders who reduce taxes, until we are doing well, and then we elect leaders to raise taxes.

It also means that if we had simply reduced spending and taxation, say 16% average instead of 18%, due to a very robust 1:3 return ratio on GDP over the last 30 years, then currently our GDP could be significantly than it is now, and even though our tax system has a reduced income over the first decade, after that it would match, then increase over time, so that our Tax Revenue take now would be almost $6T, or more. Allowing us both more to spend on those in need, but also allowing us far more financial wealth, because our GDP would be significantly higher.

We have had 3 large tax cuts in the past, known as the 1920 tax cuts, the JFK tax cuts and the Reagan tax cuts. The income of the average, lower and middle class worker increased by between 60% and 66% for 8 years following that tax cut.

Like in the report, this is a very robust account.

The problem is, when it starts working, we start spending. Reagan's biggest problem is they started spending more than they were taking in, even though tax revenue increased as expected, congress spent even more!

If we had long term restraint with spending, and hence taxation, just like in real life, we would have a larger economy and be further along.

We don't have that resolve. We want to spend it now, it makes us feel good. As we should!

The problem is by doing so we hurt ourselves in the long term, and reduce where we could be if we enact long term fiscal constraint.

We are both old enough to have seen this. We really could be making 60% more than we are now if just in our adult life the US Government had spent just 2-3% less over the course of our adulthood. Social Security wouldn't be running out, Welfare wouldn't be breaking the budget, and more money for schools, healthcare, everything really.

Spend it now, not have it later, spend it later by giving up some now.

This is Old Woman advice. It is nothing special, just very much ignored.

[pbjosh]

the upper classes are given a $1.5 trillion tax break

No - as I showed in my reply to my mistake, that $1.4T tax break isn't just for upper class. Some of it was the ACA, some was EIC, some of it was for children. It was across every tax bracket.

This is actually just incredibly disgusting. You're blatantly implying that only the upper quintile is productive and that the lower three have no contribution to that wealth. Whether you understand it for yourself or not, you actually want to see a return to feudalism.

Poor reading and comprehension skills Steve, but at least you have Gordon WAY beat. Did you do well in English or history? I mean, I failed a couple papers by grasping things so wrong.

But I am not implying anything. That is just a simple fact that is inconvenient to your position.

I said the Upper Quintile is PAYING TAXES. They make a NET CONTRIBUTION to the tax structure, and the lower quintiles make a NET LOSS to the tax balance.

That is just the way of it. They cost more than they produce.

Implying I have a moralistic position on that of feudalism... do you have a temperature?

Really?

Keep your head and think clearly - all I am saying is the poor are not some cheated group here, and that they pay NO share of taxes, so any tax cuts really can't help them without being a negative tax. Which they already get to the tune of about $29k.

Tax cuts could only really benefit though who are paying a NET IN, without giving more away.

The GDP per capita of India is ~$1800. The GDP per capita of the US is $52,000. Either that transfer of wealth is worth something to help those slovenly lower quintiles be productive, or you think wealthy Indians just aren't as productive as wealthy Americans. How 'bout that exceptionalism.

Again, said nothing of the sort.

TRY actually grasping my commentary. Or at least coming close. The wealth transfer as Ryan pointed out, is about $21,000 per person, with an extra $9k thrown in for the poor.

We are so fucking rich, compared to the world, compared to ALL of history, and still you are bitching. Dude, be happy you were born here in have some cash america.

At least we can drop the charade of "I care about the people at the bottom", since you clearly see them as unproductive leeches.

Your position hurts everybody in the long term. It strongly reduces long term growth for short term gain. It is not morally better. It just feels good now.

And like I said:

A FLAT TAX ruins all of your arguments. I would take all of that away, and tax every one after $35k or so at the same rate, rich or poor, no subsides, no credits. No benefit to corporations, or anybody rich, and remove the ability of the politician to have any chance to change it. Flat and even and fair.

[PBSteve]

A FLAT TAX ruins all of your arguments. I would take all of that away, and tax every one after $35k or so at the same rate, rich or poor, no subsides, no credits. No benefit to corporations, or anybody rich, and remove the ability of the politician to have any chance to change it. Flat and even and fair.

FYI typically flat taxes exclude investment income. If you do that, you will end up with a property-owning class and an underclass.

And without specific numbers, a flat tax doesn't mean much. From your starting point I could pretty easily come up with a flat tax scheme that's about as progressive as our current tax code. Nominal rate of 35% above 35k income looks like this compared to our current tax code. It just hits the middle class a bit harder and would really look good to anyone making >>$500,000/yr, since their nominal top rate is ~40%.

A flat tax is going to unavoidably hollow out the middle class and reduce the tax burden on the ultra-wealthy compared to most PIT schemes.

[pbjosh]

FYI typically flat taxes exclude investment income. If you do that, you will end up with a property-owning class and an underclass.

How so?

IF So, that means we should drop capital gains to 0% and everybody is awesome? I am game for that. That was kind of my point all along, glad you see it my way.

That being said, that is a 35% tax after that - I am suggesting a lower rate. I was thinking 25%, but 28.5 or 30%? Have it drop just a bit below that. And look at how awesome that is for the poor! Great looking curve, have a link?

[PBSteve]

I made the graph.

I'm not sure how that's awesome, you might reread what I said.

None of this accounts for whether or not we can afford it. I seriously doubt we could even afford what I've proposed, since it significantly reduces contributions from single taxpayers making >$100k

[Menace]

Any how to for the magic box mod? Well... googlefu tells me it's a SP component. Conceptually wouldn't the mod make it easier to short stroke?

Conceptually, yes, if the pressure is brought down, since the regged pressure is always and only what resets the trigger.

The RT-style valves helped eliminate starvation by post-regging the valve, so that the on/off operated with full tank pressure on the top, and that together with a smaller OD bottom half of the pin made for a trigger that was both 50% lighter in the pull, and 50% heavier in the reset.

This is what made it reactive.

And of course, because the pull weight never changes, the more input pressure you feed the valve, the more trigger force on reset and the faster it recharges. Double whammy.

Top speed of the valve is impressively fast, especially given its age. It's been clocked at a bit over 30 bps, but that's with only 1900 psi input, and it will do another thousand above that, so true top speed is probably somewhere in the 40s and with a little TLC is faster than that.

Even the classic valve is much faster than what most people give it credit for.

[ironyusa]

I guess what's gross to me is the shutoff tied to the trigger. On systems where the chamber pressure has to drop to allow bolt reset, I think there are better ways to do it.

[pbjosh]

I'm not sure how that's awesome, you might reread what I said.

None of this accounts for whether or not we can afford it. I seriously doubt we could even afford what I've proposed, since it significantly reduces contributions from single taxpayers making >$100k

The curve is pretty much what we pay now, and I see that you just assumed it would kill the middle class, not that there is anything functional. Got it. It is less for those who are poor.

As to whither we can afford it....

Look, we are in charge of what we spend, at least, by hiring or firing our representatives. It isn't really direct. But the bottom line is spending. It always has been.

Government as a model can be explained very easily with the basic budget any couple would have. Right now they make $34,000 a year, but are $20k in debt. They are adding another $6000 in debt.

But you know what, they can spend less. That is something they totally can do. They did in the past. In fact, adjusted for inflation, leave it at Clinton Spending levels. That is more like spending $25,000 a year. Just Dave Ramsey the shit out of the US budget.



Look at big spender GWB! Well, partially his Congress, but you get the idea.

We set the budget, and we are the US-FRIGGEN-A! The budget is ours to control, and if we want to afford it, we can. We can mimic the 90's budget (and the music? can we do that also?) and dramatically change our spending curve. That would give us good room for other areas to spend in the future, and as I noted, doing that over the long term gives us more to use later, instead of short term spending.

The problem is not the tax level - it is the spending level. A lot of this spending is on shit we don't need. We have hundreds of redundant programs. We have a lot of waste. We can lean out some areas, easy. Because just 20 years ago we spent, adjusted for inflation, about $7000 instead of about $10,000.

Don't spend it now, have more to spend later. This is entry level home economics. Right now we spend more than we make, and we make more than we every have. And we are piling it all on credit cards, starting with spend-a-lot-GWB.

Small edit addition: I consider spending to be the most important bit. I would give you all of your preferences in taxing and spending, without blinking, if we could have Clinton's spending budget.

[pbjosh]

I guess what's gross to me is the shutoff tied to the trigger. On systems where the chamber pressure has to drop to allow bolt reset, I think there are better ways to do it.

The Desert Fox did it fairly well. Shut off was tied to bolt position.

[ironyusa]

That'd be more to my liking... now I just have to find one.